PLANADVISER - May/June 2019 - 23

selling wealth management services. The reason, she says,
is that retirement plan services carry significant value,
especially when the adviser is willing to meet with participants
one on one.
" Advisers working with AssetMark-because we take
care of the investment management and due diligence
on our end-are able to use their time to go out and meet
with participants, " she says. " They don't just serve the plan
sponsor, and so it is clear that they're delivering strong value
for the plan service fees. For those advisers who do not meet
with participants to justify their planrelated
fees, it will, indeed, be difficult
to keep up with the competition and to
justify the fees, moving forward. "
Wealth & Retirement
Drive M&A
There are many high-profile examples
of large retirement plan advisory
groups that have made a plan/wealth
connection.
One cited by Darian and Francis-
the acquisition of Blue Prairie Group
by Cerity Partners-demonstrates
the coming together of retirement
and wealth management. At a high
level, Cerity Partners has been more
focused on high-net-worth individuals
and their families, while also serving
businesses and their employees and
nonprofit organizations. Blue Prairie
Group, on the other hand, has concentrated
in the areas of tax-qualified
retirement plans and foundations/
endowments, with some wealth
management as well.
" Cerity Partners was looking for
a practice in the large-employer market, because that's
where they've had great success already with their executive
counseling, financial coaching and wealth management
services, " Francis says. " The bigger the combined company,
the greater the cross-selling opportunity and the greater the
opportunity to productively engage with participants. "
On this emerging theme of creating greater cross-selling
opportunities, another recent retirement industry M&A
deal is the acquisition of Sheridan Road by Hub International
Ltd. That arrangement pairs a retirement plan and
wealth advisory shop with a full-service global insurance
broker that provides property and casualty, life and health,
employee benefits, and investment and risk management
products and services. Hub has more than 11,000 employees
in offices located throughout North America.
After the transaction closed, when speaking about their
goals for the acquisition, Hub International leadership noted
cross-selling goals similar to Cerity Partners'.
Sheridan's advisers, for their part, pointed to the opportunity
to provide solutions and services for health savings
accounts (HSAs) and supplemental benefits.
Over time, according to Dave Reich, national president of
retirement services, Hub International Investment Services
Inc., in San Diego, the combined entity will find ways to
bring the conversation about retirement plans closer to the
discussion of health and welfare benefits.
Apart from gaining new capabilities to deliver to existing
clients, Sheridan anticipates that its advisers, working
under the Hub umbrella, will be able to make and receive
numerous referrals across the larger organization.
One recent CAPTRUST acquisi " The
bigger
the combined
company, the
greater the
cross-selling
opportunity
and the greater
the opportunity
to productively
engage with
participants. "
tion is Watermark Asset Management,
headquartered outside of San
Francisco. The firm has $400 million
in assets under advisement (AUA)
across nearly 400 clients. It " handles
individual client accounts with a hightouch
approach, " Shoff notes.
On the other hand, CAPTRUST's
newly acquired Rogers Financial, out
of Harrisonburg, Virginia, is an institutional
advisory firm that advises on
more than $2.5 billion in assets for 35
retirement plans.
Underpinning its holistic vision,
CAPTRUST announced these two
acquisitions at the same time, although
the incoming firms are, themselves,
quite different.
Less than a week after these deals
were announced, the firm reported it
was bringing on board three new partners
and supporting team members
from the institutionally focused firm
FiduciaryVest
in Atlanta. The FiduciaryVest
team, led by Philly Jones,
brings more than $13 billion in client
AUA to CAPTRUST and will assume the company's brand
as part of this merger. One remaining partner and his team
will continue to operate independently under the FiduciaryVest
name-ostensibly to keep the emphasis purely on
institutional business.
" Part of why our M&A activity is getting attention is that
people know it's hard to do both private wealth and institutional
business well, " Shoff says. " We agree that it's a challenge,
but we know it's one we can solve as a unified firm.
Our clients understand and support our M&A goals, as well.
They know there has been a huge accumulation of wealth in
DC plans, and there is not really much of an infrastructure
at this point to help people spend down these assets. "
Asked what additional M&A activity the longer-term
future could bring, Shoff says the target remains three
to five acquisitions per year over the next five to 10 years.
Organic growth is " still the main event, " he adds. That
means going out and finding clients and keeping the promises
made to existing ones.
Context for these projects can be found in Fidelity's
planadviser.com May-June 2019 | 23
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